The Only Near-Term Primary Cobalt Project in the US

About Cobalt

Facts

Uses

"Cobalt is a critical raw material fundamental to industry and essential for enabling technological development and a low carbon future" ~ Cobalt Institute

Cobalt is known as an important technology enabling metal. Its uses span multiple industries, from health care and air travel to renewable energy and digital storage. Cobalt has many unique characteristics including its magnetic properties, resistance to high temperatures, wear, and corrosion.

These properties make cobalt an essential metal used in metallurgical and chemical applications, which include, but are not limited to:

As a catalyst for more efficient chemical processing and cleaner fuels.

In rechargeable batteries to help increase current density and rechargeability.

To propagate vaccines and enable diagnostics within healthcare.

As an alloy to improve magnetic qualities (particularly at elevated temperature) for space vehicles, wind turbines and prosthetics.

As a cobalt oxide used to enhance pigment colour and increase drying of paints.

To help rubber adhere to steel bracing in tires.

Enhance digital storage and increase digital processing.

Provide hardmetals for cutting, drilling, and grinding.

The driving forces for cobalt today are the
rechargeable battery and renewable energy sectors as cobalt is an essential
element in batteries. Cobalt used in chemical applications for rechargeable
batteries accounted for 53% of total global demand for cobalt in 2017 (Source:
Roskill).

Cobalt is essential to the performance of rechargeable batteries used in personal devices, power tools, grid energy storage and electric vehicles for the following reasons:

Safety – cobalt is essential for thermal stability of lithium-ion batteries and integrity of the cathode.

Stability – provides thermal stability and resistance to the structure and functioning of the rechargeable battery during charging and discharging.

Density – contributes to high energy density in Li-ion and Ni-MH/Ni-Cd batteries.

Sustainability – rechargeable batteries allow for more extensive use of renewable energy contributing to a cleaner, greener planet.

Lithium-Ion Batteries

The largest demand for cobalt has been from the rechargeable batteries industry since the 1990s. Cobalt was initially used in NiCd and NiMH cells, but since the invention of the lithium-ion battery in 1995 this technology accounted for all of the growth in cobalt consumption from the batteries sector (Source: CRU).

There are many lithium-ion battery technologies that have been developed for different end uses but the three main drivers for change include safety, the need to reduce manufacturing cost and the need for increased storage capacity. Cobalt is used in the cathode component of the lithium-ion battery, the most expensive component. Cobalt affects the battery’s charge time and energy density resulting in different battery chemistries being suitable for different end uses. Lithium manganese oxide has been used in cathodes to improve safety by decreasing the battery’s potential to overheat, which reduces the intensity of cobalt used in batteries.

Demand

Refined cobalt consumption has been steadily increasing over the past couple of years with 83,000 tonnes in 2013, 89,000 tonnes in 2014, 90,150 tonnes in 2015 and 98,000 tonnes in 2016. Global cobalt demand exceeded 100,000 tonnes for the first time in 2017. Demand for cobalt used in metallurgical applications is forecasted to grow steadily from 36,690 tonnes in 2016 to 50,000 tonnes in 2025, driven by the aerospace industry. Demand for cobalt used in non-metallurgical applications is forecasted to grow at a faster rate, at a 7.7% compounded annual growth rate (“CAGR”) through 2025.

End user consumption of cobalt will also change rapidly by 2020, with the most significant change in demand by lithium-ion batteries used in electric vehicles (“EVs”).

Energy requirement in MWh for EVs are expected to grow at 16% per annum until 2025. Battery supply is one of the key hurdles to EV growth, especially to meet demand requirements beyond 2019 and 2020. To produce this energy requirement, the battery sector is forecasted to consume 75% to 78% of total cobalt production. In addition to Tesla Motors, Inc.’s US$5.0 billion EV “Gigafactory”, LG Chem has confirmed a plant in Poland and Daimler has commenced a €500 million battery assembly plant.

Every major car manufacturer in the world has announced plans to electrify their fleets:

Auto Manufacturers

Long-term EV Target

BMW

5-25% of annual sales by 2025

Daimler

15-25% of annual sales by 2025

Audi

25-30% of annual sales by 2025

GM

1 million annual sales by 2026

Ford

30% of annual sales by 2030

VW

2-3 million annual sales by 2025

Tesla

1 million annual sales by 2020

Porsche

Investing $7.1 billion in electric mobility by 2022

Nissan

1 million annual sales by 2023

Toyota

5.5 million annual sales by 2030

Honda

2/3rds of annual sales by 2030

Volvo

1 million cumulative sales by 2025

Hyundai

10% of annual sales by 2025

Chinese OEMs

4.5 million annual sales by 2020

Source: TD Securities, 2018

The EV market continues to rise in popularity and importance. It is forecasted that strong demand from the EV market can potentially double current cobalt demand by 2022. Stationary storage cells used to store energy from sources such as wind and solar powered generators and off peak grid charging are also contributing to cobalt's significant demand growth.

Increased demand is expected to also come from metallurgical applications, which currently represent approximately one third of cobalt demand, with superalloys representing nearly half that figure or approximately 16%. CRU expects overall metallurgical demand to grow by a CAGR of 3.8% between 2018-2023, supported by a 4.7% CAGR in aerospace demand on the back of production plans from Boeing and Airbus along with global military expenditures.

Supply

Cobalt ranks 32nd globally in abundance. Typically found as a by-product to either copper or nickel, cobalt can be found all across the globe. The top 10 cobalt producing regions in 2017 include:

Democratic Republic
of Congo

64,000

Russia

5,600

Australia

5,000

Canada

4,300

Cuba

4,200

Philippines

4,000

Madagascar

3,800

Papua New Guinea

3,200

Zambia

2,900

New Caledonia

2,800

Given its designation as a technology enabling metal, cobalt is seen as critical and strategic not only due to its uses in key industrial, sustainable and technological applications, but also because the majority of the world's cobalt is found in geographic areas that suffer from, at times, unstable conditions.

Pricing

Cobalt is a physically traded commodity where published market prices are derived from telephone surveys with traders and consumers. Prices of cobalt are provided in two grades: 99.3% and 99.8% purity.

Metal Bulletin publications have traditionally been the source for market prices of cobalt. However, in 2010 the London Metal Exchange (LME) introduced the cobalt contract where prices of exchange traded contracts are published. From 2010 through 2017, LME contracts were based on 99.3% cobalt. Beginning in 2018, LME contracts have been based on 99.8% purity cobalt.

Sustainability

It is eCobalt's mission to provide clean cobalt products made safely, responsibly and transparently in the United States. eCobalt supports and aligns with such organizations such as the Cobalt Institute and the Responsible Cobalt Initiative in order to ensure that cobalt is ethical sourced and that its mining contributes to the economic, environmental and personal wellbeing of all stakeholders where cobalt is mined.

Cobalt and the Idaho Cobalt Project (ICP)

Cobalt metal, powders and chemicals remain critical in the production of rechargeable batteries and the ICP is the only primary cobalt deposit located in the United States that is environmentally permitted with the potential for near term production.

These are key attributes of the ICP that can address some of the risks and issues faced by the world cobalt market today:

As the ICP is a primary cobalt deposit (less than 2% of current world production of cobalt comes from primary deposits), it is not directly influenced by copper and nickel markets.

Being located in the United States eliminates the geopolitical and human rights issues that are attached to cobalt that comes from the DRC.

The ICP offers a unique opportunity for consumers to secure an ethically sourced, environmentally sound supply of high grade cobalt, mined safely and responsibly.

eCobalt believes that the ICP could be well positioned to capitalize on the growing demand for cobalt driven by the rechargeable battery and renewable energy sectors. In addition, previous engineering studies, now considered out of date, demonstrated the ability of the project to produce high purity cobalt metal suitable for critical applications in the aerospace sector. These are the two fastest growing sectors in the cobalt market.